With Abhi Talwalkar now at the helm of LSI Logic, the former semiconductor manufacturing company is making some major structural changes. First, the company recently announced that it is shedding its 130 nm manufacturing facility. The fab was a high-tech, 200 mm fabrication plant, one that the former Intel vice president says should have been sold a while ago. As a fabless operation, LSI Logic will be an ASIC company focusing on cutting edge IP development for custom designs and volume consumer and enterprise platforms. The company also plans to strengthen its communications business, which now provide only 15% of its revenue. While LSI Logic has quite an uphill climb, many believe the new leadership may be just what the silicon soldiers at the company need. I guess we'll have to wait and see if the company's stock can get back to the glory days it once knew. For more information, visit EE Times.

IP overflow(9:24am EST Tue Sep 20 2005)More and more people leave silicon manufacturing for focusing on design and IP. I know FPGAs are cool, but real silicon designs are far better. And if nobody fabricates ICs, then it will NOT be a happy world. Who cares if we have great chip-designs if only a few companies can make them real — of course for huge amounts of money. I am working on HLS adaptation on FPGAs, but I am no technologist. WE NEED GUYS WHO WORK ON MANUFACTURING. – by Vitya

Abhi Talwalkar must have just decided to castrate himself going from the manly of men to have no balls.

What happens when those with fab companies decide they can make more money designing the products themselves vs. being the high capital low return “man” on the totem pole. It will happen in the Far East(China, Taiwan, Korean, India ).

They can do it for a lot less too then paying overpayed US engineers

– by A real MAN

A real Moron is more like it(11:57am EST Tue Sep 20 2005)You act like you know something about the semiconductor industry, here's a brief summary of who is who in this industry. I've noted the ones that ARE NOT based in the USA for your dumb ass. Pretty easy to see who owns this $294B market. In fact Intel is 1/2 the value of this entire market all by itself. Between #1 Intel and #2 Texas Instruments they split 2/3 of it and they are both gaining.

For reference the entire semiconductor industry has a market cap of ~$294B as of today (quote for broad line semiconductor market ).

In comparison Microsoft's market cap is ~$279B almost as much as the entire semiconductor industry combined and they don't own a single fab. The semiconductor industry is having a record year this year. Last year Microsoft was actual worth more than the entire industry.

I'm happy to say I'm one of those overpaid US semiconductor design engineers (for a small fabless $0.5B company, we use LSI & TSMC fabs) and we're having a record year. My bonus was probably bigger than your entire salery, we're doing just fine. Much better than our Chinese counter parts who can't even afford their own home. In fact most of them are working for us and making us money. – by overpaid EE

noteworthy deductions(12:15pm EST Tue Sep 20 2005)LSI, a company in trouble and reinventing itself, is still worth more than double China based Charter Semiconductor. A lot is made of these guys by dumbass know nothings, but they are pretty small fish, almost 1/100th the size of Intel and only about 1/300th of the total market value. In fact I don't even know what they make at Charter. Not exactly taking over the world.

India – doesn't even show up in the who is who list of the semiconductor industry. Not one single semiconductor player is based in India. Intel and TI both have fabs and design centers there. But that revenue lands in American bank accounts. They are nothing more than hired help, they are not takiong over the world by a long shot.

The Asian manufacture numbers (except for TSMC) get most of their value from consumer electronics like DVD players and set top boxes. Samsung's main claim to fame in the semiconductor field is memory chips, both flash and DRAM. They actually have fewer chip designers than most others on the list for that reason. They pretty much split the DRAM market w/ Micron (an ~$8B American company I left off my list, sorry Micron). They pretty much split their flash market w/ Intel. – by overpaid EE

So overpaid EE, considering how low LSI is on the list, how much it costs these days to play with the big boys, and considering that you've used LSI and TSMC, do you think that they are making the right decision?

I thought LSI WAS a fab company. Could they compete in the cost intensive, high volume fab business, and if not, what are they going to do?– by grapevine

re: Overpaid EE(12:38pm EST Tue Sep 20 2005)Your info was interesting, but would have been even better if you had listed revenue instead of market cap.

Market cap doesn't really show to what extent they control the market they are in with sales, etc. – by Sabu

grapevine — LSI & TSMC(3:07pm EST Tue Sep 20 2005)one of the big drivers for LSI dumping their 130nm fab is that they are also now a front end for TSMC. That means they basically take a netlist from guys like me and do the backend physical work to run them through TSMC's 90nm and soon 65nm processes.

LSI's big value add is that they design the best on-chip SERDES in the world. they also have some other very good IP like PCIE and SAS engines. SERDES are key for PCIExpress, fiber channel, SAS, Gbit Ethernet, even wireless, all huge growth areas in the next 10 years. To leverage this technology forward this $4B company either needed to biuld a new $3B sub-90nm fab or they needed to partner up w/ someone else, they chose TSMC.

I think they made the right decision, we were going to have to leave LSI to go sub-130nm, this was a huge risk for us because no one else can compete w/ their SERDES (except Marvel who also uses TSMC). We really wanted to go TSMC as well, but unless your a multi-billion dollar player TSMC won't deal with directly, you need to go through someone who fronts for them. – by overpaid EE

Sabu — market cap(3:17pm EST Tue Sep 20 2005)I tend to disagree, in a sane market sales and profit margin should be directly reflected in the stock price. Also unless you suscribe to Dataquest or some other data service it's pretty hard to get a good handle on meaningful sales info. Even these data service I find give some pretty suspicious market data. Plus you can easily “fudge” sales data by combining or splitting out things in different ways. Market cap is decided by stock holders and beyond “fudging” by marketeers, COE's, or CFO's.

Market cap is pretty much what everyone uses for comparing company -to- company. Especially w/ Asian companies who are notorious for lieing about their sales figures. If they were SEC accountable they'd all be in jail, they are the biggest crooks on the planet… – by overpaid EE

Question for overpaid EE(3:28pm EST Tue Sep 20 2005)I have a serious question for you. I am a 3D technical artist, and I enjoy my job, I get to be creative and I get to do lots of technical problem solving…

Sometimes though I just hate the entertainment industry. I'm looking to move into something a little colder, a little more free of the bullshit. I just want to sit in a room somewhere and wrap my mind around some really deep computer design problems.

At the age of 25 what are my prospects? – by ee

How overpaid are you(5:57pm EST Tue Sep 20 2005)Show me your stub

– by A moron

The trend.. (7:22pm EST Tue Sep 20 2005)I see two trends. Designs that don't push the silicon envelope. Just ones that continue to leverage the ever increasing capability of silicon integration. Can't afford to do the silicon and will be at risk if they don't innovate design and product. Thus if EE is truely overpaid the poor but very smart engineers in India and China will figure out a way to do it cheaper and take your job away LOL

Then there are people like TI, INTEL that coupled the design and silicon so tightly as to create a huge competive advantage and are pulling far ahead that NO one will catch them.

Then there is Samsung that could eat TI and INTEL. Probably trying to figure out if it should by AMD

MAXIM and the other anlog or speciality nich producers like microchip and IR will survive and florish – by Know it all

Samsung's semiconductor income is a fraction of it's $41B net worth and it's made up of only 2 kinds of parts, flash memory and DRAM. TI actually sold it's DRAM group to Micron a few years back which is Samsung's main DRAM competitor. Intel is their main flash competitor. Only recently has Samsung emmerged to be an Intel/TI class player and that's still a fraction of what the #1 and #2 are worth.

In this world $41B companies don't “eat” $54B TI's or $152B Intel's.

If any body is going to eat anybody it will be Intel. At $152B they make 1/2 of all the ~$300B semiconductor industry all by themself. They have market fluctuations that are greater than the value of 1/2 of the other $10B players in this market (including AMD and everything in China).

– by overpaid EE

Market cap or revenue income..(2:26pm EST Wed Sep 21 2005)YOu are overpaid? Market cap is not the same as revenue and profit. It is only the value that investors peg the company at…

Revenue Profit CashSamsung 1010B Intel 36B 8B 14BTI 12B 2B 4.5B

Tell me again who has resources?by the way INTEL CEO has personal said that INTEL's number 1 competitor is Samsung…. – by Real know it all